September 28, 2023
United States:
Fed’s Goolsbee Says Traditional Economic View May Cause Overshoot
Federal Reserve Bank of Chicago President Austan Goolsbee said policymakers shouldn’t place too much weight on the traditional economic idea that steep job losses are needed to quell inflation, which he said could lead officials to raise interest rates too high.
This traditionalist view, Goolsbee said, “misses key features of our recent inflationary experience and that, in today’s environment, believing too strongly in the inevitability of a large trade-off between inflation and unemployment comes with the serious risk of a near-term policy error.” The comments were prepared for delivery Thursday at the Peterson Institute for International Economics in Washington.
Europe:
German Inflation Sinks to Level Last Seen Before War in Ukraine
German inflation plunged to its lowest level in two years after the effect of heavily discounted public transport last summer disappeared from the comparison.
Consumer prices advanced 4.3% from a year ago in September, compared with 6.4% in August, the statistics office said Thursday.
Asia:
China’s Golden Week May Spur Volatility for Yuan at ‘Red Line’
The Chinese yuan is facing multiple headwinds. Now comes the Golden Week holiday, when trading will be frozen in mainland China, but continues in most other places worldwide — thus potentially creating disconnects with other assets.
During the eight-day holiday period, there won’t be any daily reference rates during the closing of the onshore market. Volumes are already declining into the period, as the People’s Bank of China tightens its grip on the currency, reducing room for traders to place directional bets.
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